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1、 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30,2024 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 193
2、4 For the transition period from _ to _ Commission file number:001-38029 AKOUSTIS TECHNOLOGIES,INC.(Exact name of registrant as specified in its charter)Delaware 33-1229046(State or other jurisdiction ofincorporation or organization)(IRS EmployerIdentification No.)9805 Northcross Center Court,Suite
3、A Huntersville,NC 28078(Address of principal executive offices)(Postal Code)Registrants telephone number,including area code:1-704-997-5735 Securities registered under Section 12(b)of the Act:Title of Each Class:Trading Symbol Name of each exchange on which registered:Common Stock,$0.001 par value A
4、KTS The Nasdaq Stock Market LLC(Nasdaq Capital Market)Securities registered under Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file
5、 reports pursuant to Section 13 or 15(d)of the Exchange Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Exchange Act during the preceding 12 months(or forsuch shorter period that the registrant was required to file su
6、ch reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T duringthe preceding 12 months(or for such
7、shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,smaller reporting company,or an emerging growthcompany.See the definitions of“large accelerated filer,”
8、“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large Accelerated Filer Accelerated FilerNon-Accelerated Filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has el
9、ected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effective
10、ness of its internal control over financialreporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the fin
11、ancial statements of the registrant included in the filing reflect thecorrection of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of t
12、heregistrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the registrants common stock,par value$0.001 per share(“Co
13、mmon Stock”),held by non-affiliates on December 31,2023 was approximately$60.4 million.For purposes of this computation,shares of Common Stock held by all officers,directors,and any beneficial owners of 10%or more of the outstanding CommonStock were excluded because such persons may be deemed to be
14、affiliates of the registrant.Such determination should not be deemed an admission that such persons are,infact,affiliates of the registrant.As of October 2,2024,there were 154,590,918 shares of Common Stock issued and outstanding.DOCUMENTS INCORPORATED BY REFERENCE The registrant intends to file a d
15、efinitive proxy statement pursuant to Regulation 14A within 120 days after the end of the fiscal year ended June 30,2024.Portions of suchproxy statement are incorporated by reference into Part III of this Form 10-K.TABLE OF CONTENTS Item Number and Caption Page Cautionary Note Regarding Forward-Look
16、ing Information ii PART I 1 1.Business 1 1A.Risk Factors 11 1B.Unresolved Staff Comments 37 2.Properties 38 3.Legal Proceedings 38 4.Mine Safety Disclosures 38 PART II 39 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases Of Equity Securities 39 6.Reserved 40 7.M
17、anagements Discussion and Analysis of Financial Condition and Results of Operations 40 7A.Quantitative and Qualitative Disclosures About Market Risk 45 8.Financial Statements and Supplemental Data F-1 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 46 9A.Contro
18、ls and Procedures 46 9B.Other Information 46 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspection 46 PART III 47 10.Directors,Executive Officers and Corporate Governance 47 11.Executive Compensation 47 12.Security Ownership of Certain Beneficial Owners and Management and Related Sto
19、ckholder Matters 47 13.Certain Relationships and Related Transactions,and Director Independence 47 14.Principal Accountant Fees and Services 47 PART IV 48 15.Exhibits and Financial Statement Schedules 48 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION This Annual Report on Form 10-K(this“Rep
20、ort”)contains forward-looking statements that relate to our plans,objectives,estimates,and goals.Any and all statementscontained in this report that are not statements of historical fact may be deemed to be forward-looking statements.Terms such as“may,”“will,”“might,”“would,”“should,”“could,”“projec
21、t,”“estimate,”“predict,”“potential,”“strategy,”“anticipate,”“attempt,”“develop,”“plan,”“help,”“seek,”“believe,”“continue,”“intend,”“expect,”“future,”and terms of similar import(including the negative of any of the foregoing)may identify forward-looking statements.However,not all forward-looking stat
22、ements may containone or more of these identifying terms.Forward-looking statements in this report may include,without limitation,statements regarding(i)the plans and objectives ofmanagement for future operations,including plans or objectives relating to the development of commercially viable radio
23、frequency(“RF”)filters,(ii)projections of income(including income/loss),earnings(including earnings/loss)per share,capital expenditures,dividends,capital structure or other financial items,(iii)our future financialperformance,including any such statement contained in the managements discussion and a
24、nalysis of financial condition or in the results of operations included pursuant to therules and regulations of the Securities and Exchange Commission(the“SEC”),(iv)our ability to efficiently utilize cash and cash equivalents to support our operations for agiven period of time,(v)our ability to enga
25、ge customers while maintaining ownership of our intellectual property,and(vi)the assumptions underlying or relating to anystatement described in(i),(ii),(iii),(iv)or(v)above.Forward-looking statements are not meant to predict or guarantee actual results,performance,events or circumstances and may no
26、t be realized because they are based upon ourcurrent projections,plans,objectives,beliefs,expectations,estimates and assumptions and are subject to a number of risks and uncertainties and other influences,many ofwhich are beyond our control.Actual results and the timing of certain events and circums
27、tances may differ materially from those described by the forward-looking statementsas a result of these risks and uncertainties.Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differmaterially from expected or desired results ma
28、y include,without limitation,if we are unable to arrange financing in the near term or timely appeal recent judgments and awards issued by the Delaware District Court,we may be forced to seekprotection by filing a voluntary petition for relief under the Bankruptcy Code;our limited operating history,
29、our inability to generate revenues or achieve profitability,the impact of the conflicts in Ukraine and the Middle East,global pandemics such as COVID-19,and other sources of volatility on our operations,financial conditionand the worldwide economy,including our ability to access the capital markets,
30、increases in prices for raw materials,labor,and fuel caused by rising inflation,our inability to obtain adequate financing and sustain our status as a going concern,the results of our research and development(“R&D”)activities,our inability to achieve acceptance of our products in the market,general
31、economic conditions,including upturns and downturns in the industry,existing or increased competition,our inability to successfully scale our New York wafer fabrication facility and related operations while maintaining quality control and assurance and avoiding delaysin output,contracting with custo
32、mers and other parties with greater bargaining power and agreeing to terms and conditions that may adversely affect our business,the possibility that the anticipated benefits from our business acquisitions will not be realized in full or at all or may take longer to realize than expected,the possibi
33、lity that costs or difficulties related to the integration of acquired businesses operations will be greater than expected and the possibility of disruptions toour business during integration efforts and strain on management time and resources,risks related to doing business in foreign countries,inc
34、luding rising tensions between the United States and China,any cybersecurity breaches or other disruptions compromising our proprietary information and exposing us to liability,our limited number of patents,ii failure to obtain,maintain and enforce our intellectual property rights,claims of infringe
35、ment,misappropriation or misuse of third-party intellectual property,including the lawsuit filed by Qorvo,Inc.in October 2021,that,regardless ofmerit,has resulted in significant expense and a large jury award and related awards in respect of attorneys fees and pre-and post-judgment interest in favor
36、 of Qorvo,the impact of recent departures of executive officers and directors and our inability to attract and retain qualified personnel,results of any arbitration or litigation that may arise,our reliance on third parties to complete certain processes in connection with the manufacture of our prod
37、ucts,product quality and defects,our ability to market and sell our products,our failure to innovate or adapt to new or emerging technologies,including in relation to our competitors,our failure to comply with regulatory requirements,stock volatility and illiquidity,our failure to implement our busi
38、ness plans or strategies,our failure to maintain effective internal control over financial reporting,our failure to obtain or maintain a Trusted Foundry accreditation or our New York fabrication facility,and shortages in supplies needed to manufacture our products,or needed by our customers to manuf
39、acture devices incorporating our products.A description of the risks and uncertainties that could cause our actual results to differ materially from those described by the forward-looking statements in this Report appearsin the section captioned“Risk Factors”and elsewhere in this Report.Readers are
40、cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors.Except as may berequired by law,we do not undertake any obligation to update the forward-looking statements contained in this Report to reflect any new i
41、nformation or future events orcircumstances or otherwise.iii DEFINITIONS When used in this Report,the terms,“we,”“Akoustis,”the“Company,”“our,”and“us”refers to Akoustis Technologies,Inc.,a Delaware corporation,and its wholly ownedconsolidated subsidiaries,Akoustis,Inc.,also a Delaware corporation,RF
42、M Integrated Device,Inc.,a Texas corporation(“RFMi”),and Grinding and Dicing Services,Inc.,aCalifornia corporation(“GDSI”).Glossary The following is a glossary of technical terms used herein:Acoustic wave-a mechanical wave that vibrates in the same direction as its direction of travel.AlN-Aluminum N
43、itride.Acoustic wave filter-an electromechanical device that provides radio frequency control and selection,in which an electrical signal is converted into a mechanicalwave in a device constructed of a piezoelectric material and then back to an electrical signal.Band,channel or frequency band-a desi
44、gnated range of radio wave frequencies used to communicate with a mobile device.Bulk acoustic wave(BAW)-an acoustic wave traveling through a material exhibiting elasticity,typically vertical or perpendicular to the surface of a piezoelectricmaterial.Digital baseband-the digital transceiver,which inc
45、ludes the main processor for the communication device.Duplexer-a bi-directional device that connects the antenna to the transmitter and receiver of a wireless device and simultaneously filters both the transmit signal andreceive signal.Filter-a series of interconnected resonators designed to pass(or
46、 select)a desired radio frequency signal and block unwanted signals.Group III element nitrides-a dielectric material comprised of group IIIA element,such as boron(B),aluminum(Al)or gallium(Ga),combined with group 5A(orVA nitrogen)to form a compound semiconductor nitride such as BN,AlN,or GaN.For res
47、onators,the dielectric is typically chosen based upon the piezoelectricconstant of the material in order to generate the highest electromechanical coupling.iv Insertion Loss-the power losses associated with inserting a BAW filter into a circuit.Lossy-resistive losses that result in heat generation.M
48、etrology-techniques used to evaluate materials,devices and circuits.Monolithic topology-a description of an electrical circuit whereby all the elements of the circuit are fabricated at the same time using the same process flow.Power Amplifier Duplexer(PAD)-an RF module containing a power amplifier a
49、nd duplex filter components for the RFFE of a smartphone.Piezoelectric materials-certain solid materials(such as crystals and certain ceramics)that produce a voltage in response to applied mechanical stress,or that deformwhen a voltage is applied to them.Quality factor,or Q-energy stored divided by
50、the energy dissipated per cycle.Higher Q represents a higher caliber of resonance and implies mechanical andelectrical factors responsible for energy dissipation are minimal.For a given amount of energy stored in a resonator,Q represents the number of cycles resonance willcontinue without additional
51、 input of energy into the system.Resonator-a device whose impedance sharply changes over a narrow frequency range and is characterized by one or more resonance frequency due to a standingwave across the resonators electrodes.The vibrations in a resonator can be characterized by mechanical“acoustic”w
52、aves which travel without a characteristic soundvelocity.Resonators are the building blocks for RF filters used in mobile wireless devices.RF-radio frequency.RF front-end(RFFE)-the circuitries in a mobile device responsible for processing the analog radio signals;located between the devices antenna
53、and the digitalbaseband.RF spectrum-a defined range of frequencies.Surface acoustic wave(SAW)-an acoustic sound wave traveling horizontally along the surface of a piezoelectric material.TDD LTE-Time Division Duplex-Long-Term Evolution or a wireless standard which shares the bandwidth between transmi
54、t and receive.Tier one-a supplier or OEM with substantial market share.Tier two-a supplier or OEM with an established but not substantial market share.Wafer-a thin slice of semiconductor material used in electronics for the fabrication of integrated circuits.v PART I ITEM 1.BUSINESS Overview Akousti
55、s Technologies,Inc.,a Delaware corporation,was incorporated in 2013.The Company is focused on developing,designing,and manufacturing innovative RF filtersolutions for the wireless industry,including for products such as smartphones and tablets,network infrastructure equipment,Wi-Fi Customer Premise
56、Equipment(“CPE”),anddefense applications.Filters are critical in selecting and rejecting signals,and their performance enables differentiation in the modules defining the RF front-end(“RFFE”).Located between the devices antenna and its digital backend,the RFFE is the circuitry that performs the anal
57、og signal processing and contains components such as amplifiers,filters and switches.We have developed a proprietary microelectromechanical system(“MEMS”)based bulk acoustic wave(“BAW”)technology and a unique manufacturingprocess flow,called“XBAW”,for our filters produced for use in RFFE modules.Our
58、 XBAW filters incorporate optimized high purity piezoelectric materials for highpower,high frequency and wide bandwidth operation.We are developing RF filters for 5G,Wi-Fi and defense bands using our proprietary resonator device models and productdesign kits(“PDKs”).As we qualify our RF filter produ
59、cts,we are engaging with target customers to evaluate our filter solutions.Our initial designs target UHB,sub-7 GHz5G,Wi-Fi and defense bands.We expect our RF filter solutions will address problems(such as loss,bandwidth,power handling,and isolation)created by the growing numberof frequency bands in
60、 the RFFE of mobile devices,infrastructure and premise equipment to support 5G,and Wi-Fi.We have prototyped,sampled and shipped our single-bandlow loss BAW filter designs for 5G frequency bands and 5 GHz and 6 GHz Wi-Fi bands which are suited to competitive BAW solutions and historically cannot be a
61、ddressedwith low-band,lower power handling surface acoustic wave(“SAW”)technology.Additionally,through our wholly owned subsidiary,RFMi,of which we acquired majorityownership in October 2021 and full ownership in April 2023,we operate a fabless business whereby we make sales of complementary SAW res
62、onators,RF filters,crystal(“Xtal”)resonators and oscillators,and ceramic productsaddressing opportunities in multiple end markets,such as automotive and industrial applications.We also offer back-end semiconductor supply chain services through our wholly owned subsidiary,GDSI,which we acquired in Ja
63、nuary 2023.We own and/or have filed applications for patents on the core resonator device technology,manufacturing facility and intellectual property(“IP”)necessary to produce our RFfilter chips and operate as a“pure-play”RF filter supplier,providing discrete filter solutions direct to Original Equi
64、pment Manufacturers(“OEMs”)and aligning with the front-end module manufacturers that seek to acquire high performance filters to expand their module businesses.We believe this business model is the most direct and efficientmeans of delivering our solutions to the market.Technology.Our device technol
65、ogy is based upon bulk-mode acoustic resonance,which we believe is superior to surface-mode resonance for high-band and ultra-high-band(“UHB”)applications that include 4G/LTE,5G,Wi-Fi,and defense applications.Although some of our target customers utilize or manufacture the RFFEmodule,they may lack a
66、ccess to critical UHB filter technology that we produce,which is necessary to compete in high frequency applications.Manufacturing.We currently manufacture Akoustis high-performance RF filter circuits,using our first generation XBAW wafer process,in our 125,000-square footwafer-manufacturing facilit
67、y located in Canandaigua,New York(the“New York Facility”),which we acquired in June 2017.Our SAW-based RF filter products aremanufactured by a third party and sold either directly or through a sales distributor.Intellectual Property.As of September 1,2024,our IP portfolio included 97 patents.Additio
68、nally,as of September 1,2024,we have 31 pending patent applications.These patents cover our XBAW RF filter technology from raw materials through the system architectures.Given the significance of the Companys intellectualproperty to its business,the Company enforces its intellectual property rights
69、and protects its patent portfolio,which may include filing lawsuits against companies thatthe Company believes are infringing upon its patents.The Company considers protecting its intellectual property rights to be central to its business model andcompetitive position in the RF filter industry.By de
70、signing,manufacturing,and marketing our RF filter products to mobile phone OEMs,defense OEMs,network infrastructure OEMs,and Wi-Fi CPE OEMs,we seek toenable broader competition among the front-end module manufacturers.Since we own and/or have filed applications for patents on the core technology and
71、 control access to our intellectual property,we expect to offer several ways to engage withpotential customers.First,we engage with multiple wireless markets,providing standardized filters that we design and offer as standard catalog components.Second,wedeliver unique filters to customer-supplied sp
72、ecifications,which we design and fabricate on a customized basis.Finally,we offer our models and design kits for our customersto design their own filters utilizing our proprietary technology.1 We expect to continue to incur substantial costs for commercialization of our technology on a continuous ba
73、sis because our business model involves materials and solid-statedevice technology development and engineering of catalog and custom filter design solutions.To succeed across our combined portfolio of Akoustis,XBAW,and RFMiproducts,we must convince customers in a wide range of industries including m
74、obile phone OEMs,RFFE module manufacturers,network infrastructure OEMs,Wi-Fi CPEOEMs,medical device makers,automotive and defense customers to use our products in their systems and modules.For example,since there are two dominant BAW filtersuppliers in the industry that have high-band technology,and
75、 both utilize such technology as a competitive advantage at the module level,we expect customers that lack accessto high-band filter technology will be open to engage with our company for XBAW filters.To help drive our XBAW filter business,we plan to continue to pursue RF filter design and R&D devel
76、opment agreements and potentially joint ventures with target customersand other strategic partners,although we cannot guarantee we will be successful in these efforts.These types of arrangements may subsidize technology development costs andqualification,filter design costs,and offer complementary t
77、echnology and market intelligence and other avenues to revenue.However,we intend to retain ownership of our coreXBAW technology,intellectual property,designs,and related improvements.Across our combined portfolio of Akoustis,XBAW,and RFMi products,as resources permit,weexpect to continue development
78、 of catalog designs for multiple customers and to offer such catalog products in multiple sales channels.Recent Developments On April 3,2024,we announced two new bandedge RF filter products for Wi-Fi Automotive and Access Point applications.These filters are expected to ramp into productionin the se
79、cond half of calendar year 2024.On April 8,2024,we announced that our high-performance narrowband patented XBAW filters are being designed into a new program with an enterprise-class originalequipment manufacturer(OEM).On May 1,2024,we announced two design wins with a Tier-1 Network Infrastructure c
80、ustomer for two Wi-Fi 7 fixed wireless access enterprise and home gateway platforms.On May 17,2024,after a trial in the U.S.District Court for the District of Delaware(the“District Court”)in the matter of Qorvo Inc.vs.Akoustis Technologies,Inc.DE Case1:21-cv-01417-JPM(the“Qorvo Litigation”),a jury v
81、erdict was entered in favor of plaintiff,Qorvo Inc.(“Qorvo”),and against the Company.Although several of Qorvosclaims were either withdrawn or dismissed before or during trial,or decided by the jury in the Companys favor,the jury found that the Company was unjustly enriched by thewillful misappropri
82、ation of certain Qorvo trade secrets and that certain accused products infringed U.S.Patent Nos.7,522,018 and 9,735,755.The Company believes that itsXBAW products incorporating previously disclosed design updates are not affected by this verdict.The jury awarded Qorvo approximately$38.6 million in d
83、amages.On May 22,2024,we announced the final release to manufacturing of design updates across our product portfolio which removed any patent features claimed by Qorvo in U.S.Patent Nos.7,522,018 and 9,735,755.On June 27,2024,we announced that we received$2 million in volume orders for Wi-Fi 7 progr
84、am from a Tier-1 carrier in their Tri-Band 4x4 MIMO router.On July 9,2024,we announced an$8 million volume XBAW order with a Tier-1 customer to be used in their Wi-Fi 6E and Wi-Fi 7 Access Points.On August 13,2024,we announced an additional purchase order for$13 million XBAW filters from our existin
85、g Tier-1 customer for use in their Wi-Fi Access Points raisingproduction commitments to greater than$21 million,plus a customer option to increase order quantities.On September 9,2024,the District Court issued an Order Granting in Part and Denying in Part Plaintiffs Motion for Attorneys Fees(the“Att
86、orneys Fees Order”).TheAttorneys Fees Order awarded Qorvo approximately$11.7 million in attorneys fees(the“Attorneys Fees Award”).On September 10,2024,the District Court issued an Order on Pre-and Post-Judgment Interest(the“Judgment Interest Order”and,together with the Attorneys Fees Order,the“Order
87、s”).The Judgment Interest Order awarded Qorvo approximately$7.3 million(the“Judgment Interest Award”and,collectively with the Damages Award and theAttorneys Fees Award,the“Awards”).The Orders are not enforceable or appealable;instead,the Awards will be included in the District Courts final judgment,
88、which will also reflect the outcome of the Post-TrialMotions and Qorvos other post-trial motions.Once the District Court renders its final judgment,the Defendants and Qorvo will have thirty days within which to challenge it(including the Awards)by filing a notice of appeal.If the Company elects to a
89、ppeal the final judgment and posts an undertaking(such as an appeal bond)within thirty days ofentry of final judgment,the Awards would not be enforceable pending the exhaustion of all appeals.2 Financing We have not achieved profitability from operations,and so have funded our operations largely wit
90、h issuances of equity and debt securities,as well as development contracts,RF filter and production orders,government grants,MEMS foundry services(which we exited in 2021)and engineering services.We have historically incurred losses whichare primarily the result of material and processing costs asso
91、ciated with developing and commercializing our technology,as well as personnel costs,professional fees(primarilyaccounting and legal),and other general and administrative(“G&A”)expenses.We expect to continue to incur substantial costs for the commercialization of our technology ona continuous basis
92、because our business model involves materials and solid-state device technology development and engineering of catalog and custom filter designsolutions.On May 17,2024,the jury in the Qorvo Litigation awarded Qorvo approximately$38.6 million in damages.On September 9 and 10,2024,the District Court i
93、ssued ordersawarding Qorvo an aggregate of approximately$19.0 million in attorneys fees and pre-and post-judgment interest(collectively,the“Awards”).Although,as of the date of thisReport,the District Court has not entered a final judgment in respect of the jury verdict in the Qorvo Litigation,and Ak
94、oustis may elect to appeal such final judgment and theAwards,these matters raise substantial doubt about the Companys ability to continue as a going concern.If we elect not to appeal an adverse final judgment or the Awards,orif we are unable to post an undertaking(such as an appeal bond)to enable us
95、 to do so,we will likely be forced to pursue a reorganization proceeding under Chapter 11 of theU.S.Bankruptcy Code.Except for the Companys ATM Sales Agreement with Craig-Hallum Capital Group LLC and Roth Capital Partners,LLC,with respect to which the sales agents are under noobligation to sell any
96、shares of Common Stock and the use of which may depend on market conditions,the Company has no commitments or arrangements to obtain anyadditional funds,and there can be no assurance such funds will be available on acceptable terms or at all.Recent Financing Activity Registered Direct Offering of Co
97、mmon Stock and Pre-Funded Warrants On May 22,2024,the Company entered into a securities purchase agreement and placement agency agreement with Roth Capital Partners,LLC(“Roth”)to issue and sell anaggregate of 10,500,000 shares of its Common Stock,and pre-funded warrants to purchase up to 39,500,000
98、shares of Common Stock in a registered direct offering.Theoffering price was$0.20 per share and$0.199 per pre-funded warrant.Under the placement agency agreement,the Company agreed to pay the Placement Agent an aggregatecash fee equal to 6.0%of the aggregate gross proceeds received by the Company fr
99、om the sale of the securities and to reimburse the placement agent for up to$50,000 ofexpenses.The closing of the offering occurred on May 24,2024.Gross proceeds were approximately$10.0 million,before deducting placement agent fees and estimatedoffering expenses payable by the Company.The prefunded
100、warrants were treated as equity and are included in Additional paid in capital on the Consolidated Balance Sheetincluded in this Report.During the fiscal year ended June 30,2024,8.5 million pre-funded warrants were exercised.Underwritten Offering of Common Stock On January 29,2024,the Company closed
101、 an underwritten public offering of 23,000,000 shares of Common Stock at a price to the public of$0.50 per share pursuant to anunderwriting agreement with Roth.The shares of Common Stock issued at closing included 3,000,000 shares issued pursuant to the underwriters over-allotment option,whichwas ex
102、ercised in full.Gross proceeds totaled$11.5 million before deducting the underwriting discount and offering expenses of approximately$1.1 million resulting in netproceeds from the offering of approximately$10.4 million.Certain of the Companys directors,officers and employees participated in the offe
103、ring by purchasing an aggregateof$1.0 million of shares on the same terms and conditions as other investors.3 Our XBAW Filter Technology and Business Current RF acoustic wave filters utilize piezoelectric material physical properties,the resonator device structure and the manufacturing process techn
104、ology.Existing BAWfilters use an“acoustic wave ladder”that is based on a monolithic topology approach using polycrystalline materials.XBAW technology encompasses cutting-edge polycrystalline,single-crystal and other high purity piezoelectric materials,which are fabricated into bulk-mode,acoustic wav
105、eresonators and RF filters.Our innovative piezoelectric materials contain high-purity Group III element nitride materials and possess a unique signature,which can be detectedby conventional material metrology tools.We utilize analytical modeling techniques to aid in the design and internal manufactu
106、ring of our materials,whereby the raw substratematerials utilized in our XBAW process are sourced from a third party.Once our filter designs are simulated and ready to manufacture,we supply the NY Facility rawmaterials,a mask design file,and a unique process sequence to fabricate our resonators and
107、filters.We hold many issued and pending patents on our XBAW wafer process flow,which is compatible with wafer level packaging(WLP)that allows for low-profile,cost-effective filters to be produced.Technological Challenges Facing the Mobile Device Industry Rising consumer demand for always-on wireless
108、 broadband connectivity creates an unprecedented need for high performance RFFE modules for mobile devices.Mobiledevices such as smartphones,tablets and wearables are quickly becoming the primary means of accessing the Internet and driving the Internet of Things(IoT).Rapid growth inmobile data traff
109、ic tests the limits of existing wireless bandwidth.Carriers and regulators have responded by opening new spectrums of RF frequencies,driving up the numberof frequency bands in mobile devices.This substantial increase in frequency bands has created a demand for more filters,as well as a demand for fi
110、lters with higher selectivity.The global transition to LTE and adoption of LTE-Advanced with more sophisticated carrier aggregation and multiple-input,multiple-output(MIMO)techniques has continuedto push the requirements for increased supply of high-performance filters.Furthermore,the introduction o
111、f 5G mobile technologies and their associated frequencies has createdan even greater need for high-performance,high-frequency filters as the bands being auctioned have primarily been in the 3-6 GHz range,well above the frequencies of currentnetworks.The new spectrum introduced by 4G/LTE and 5G is dr
112、iving spectrum licensing at higher frequencies than previous 3G smartphone models.For example,new TDD LTEfrequencies allocated for 5G wireless cover frequencies nearly twice as high as those covered in previous generation phones.As a result,the demand for filters represents thesingle largest opportu
113、nity in the RFFE industry,according to a Mobile Experts 2022 report.For traditional“low band”frequencies,SAW filters have been the primary choice,while high band solutions have utilized BAW filters due to their performance and yield.While there are multiple sources of supply for SAW technology,the s
114、ource of supplyfor BAW filters is more limited and essentially dominated by two manufacturers worldwide.See“Competition”below.In addition,signal loss of current generation acoustic wave filters is excessively high,and up to half of the transmit power is wasted as heat,which ultimately constrains bat
115、terylife.Another challenge is that the allocated spectrum for mobile communication bands requires high bandwidth RF filters,which,in turn,requires wide bandwidth coreresonator technology.In addition,filters with inferior selectivity either reduce the number or bandwidth of operating bands the mobile
116、 device can support or increase the noisein the operating bands.Each of these problems negatively impacts the end-users experience when using the mobile device.The RFFE must meet growing data demands while reducing cost and improving battery life.Our solution involves a new approach to RFFE componen
117、t manufacturing,enabledby XBAW technology.We expect our XBAW technology to produce filters that will reduce the overall system cost and improve performance of the RFFE.4 Our XBAW Filter Solutions Our XBAW filter business is focused on the commercialization of wide bandwidth RF filters operating in t
118、he high frequency spectrum known as the sub 8 GHz bands.Usingour XBAW technology,we believe these filters enable new power amplifier duplexer(PAD)module or RFFE competition for high band modules as well as performance-drivenlow band applications.Initially,we expect to target select strategic RFFE ma
119、rket leaders as well as tier two mobile phone OEMs and/or RFFE module suppliers.Longer term,the focus of our XBAW filter business will be to expand our market share by engaging with additional mobile phone OEMs and RFFE module manufacturers.We manufactureour XBAW wafers in our Canandaigua,NY fabrica
120、tion facility where we continue to focus on the commercialization of our filters using our XBAW technology.We plan tocontinue,as resources permit,to develop a series of filter designs to be used in the manufacturing of discrete filters,duplexers or more complex multiplexers targeting the4G/LTE,5G,Wi
121、-Fi,automotive and defense frequency bands.We believe our filter designs will create an alternative for,and replace,filters currently manufactured usingmaterials with fundamentally inferior performance.Figure 1 below illustrates characterization plots that represent the high power,high bandwidth and
122、 high frequency capabilityof our high purity piezoelectric materials.Figure 1-Characteristics of our high purity piezoelectric materials used to fabricate our BAW RF filters.Single-Band Discrete Designs,Duplexers and Multiplexers SAW filters are generally desired in modern RFFE because of their perf
123、ormance,small size and low cost.However,traditional SAW ladder designs do not perform well in highfrequency bands or bands with closely spaced receive and transmit channels,typical of many new bands.Therefore,BAW filters are preferred for these bands.In the NYFacility,we fabricate BAW resonators,the
124、 building block of BAW filters,that offer high frequency,wide bandwidth and high-power performance.We believe the improvedefficiency provided by BAW filters will reduce the total cost of RFFE modules,offer efficient use of shared frequency spectrum as well as reduce the battery demand of mobiledevic
125、es.Additionally,we believe that our XBAW technology will allow for a single manufacturing method that will support all of the BAW filter band range and a significantportion of the SAW band range.Figure 2 below illustrates what we believe will be the frequency range of our XBAW technology.5 Figure 2-
126、The potential range of our technology.Pure-Play Filter Provider Enables New Module Competition Our XBAW and XP3F technology allows for a wide range of frequency coverage,and we plan to supply XBAW filters that will support frequency bands from 2 to 20+GHz for4G/LTE,5G,Wi-Fi,automotive,timing,defense
127、 and future radio3(“FR3”)applications.We have successfully demonstrated resonators and filters that will support the designand fabrication of 5G/LTE filters,Wi-Fi filters and defense filters,with frequencies adjacent to the 5G mobile frequencies,in particular the N77,N78,and N79 bands.We havetransit
128、ioned our XBAW technology to high volume manufacturing with the target of being a pure-play filter supplier that will address the increasing RF complexity placed onRFFE manufacturers.Our XP3F technology is expected to enable the new smart phone and wireless infrastructure requirements for FR3 and SA
129、TCOM applications,allowing integration of smallersize and less weight from the conventional technology.Figure 3 illustrates historical and projected growth in RF complexity.Figure 3-Projected Increase in Filter content in Mobile Phone Front End Modules(FEMs)from 2021-2027(Source:Mobile Experts 2022)
130、.6 Commercialization of XBAW Filters and Developmental XP3F Technology The immediate focus of our XBAW filter business is on the commercialization of wide bandwidth RF filters to address the Wi-Fi,Network Infrastructure and Defense bandswith innovative single-band designs using our XBAW sub 8 GHz RF
131、 filter technology.We are currently developing commercial single-band XBAW filters through the NYFacility.We are focused on developing fixed-band XBAW filters because we believe these designs present the greatest near-term potential for commercialization of ourtechnology.Our technology development p
132、rocess consists of the following five phases:1.Pre-Alpha Demonstrate basic feasibility/capabilities 2.Alpha Develop stable recipe(Process freeze)with limited production development 3.Beta Complete technology qualification(Process qualification)in factory to enable product design 4.Pre-Production Dem
133、onstrate lead product production capabilities,release final design tools 5.Production Continual improvement of process and parametric performance We have completed all phases for our first generation XBAW process technology called XB1.Additionally,we have received and delivered orders for pre-produc
134、tion productsbased on our XBAW process technology,and as of end fiscal 2024,we have shipped more than 97 million XBAW filters to the 5G mobile,Wi-Fi,5G infrastructure and defensemarkets.Currently our XP3F technology is in the“Beta”phase,having successfully completed Phase 1 of our contract with the
135、Defense Advanced Research Projects Agency(DARPA)COmpact Front end Filters as the ElEmental level(COFFEE)program as the only commercially viable filter to demonstrate success up to 20GHz.Akoustis is pursuing furthergovernment-funded projects and has been involved in more than 9 subsequent projects th
136、at are expected to be awarded to the selected bidders in the coming months.One ofthese project submissions is targeted at enabling communications during the Los Angeles 2028 Olympic Games.Research and Development Since inception,the Companys focus has been on developing material science that innovat
137、es wireless filter technology with a compelling value proposition to our potentialcustomers and a significant and noticeable impact to the end user.Compared to legacy polycrystalline material(used to manufacture RF resonators and filters),our patentedXBAW technology employs high purity piezoelectric
138、 films in our resonators,which are used as the enabler to create high performance BAW RF filters.Our high puritypiezoelectric materials are a key differentiator when compared to the incumbent amorphous thin-film technologies because they increase the acoustic velocity,theelectromechanical coupling c
139、oefficient in the resonator and/or high-power performance.These technology features allow Akoustis to engineer RF filter solutions for a broadspectrum for multiple radio frequencies and thus multiple end markets.Research and development expense totaled$30.0 million for the year ended June 30,2024,an
140、d$33.2 million for the year ended June 30,2023.R&D activities focused on highpurity piezoelectric materials development and resonator demonstration.Current R&D investments include materials advancement,resonator development,RF filter design,high yield wafer manufacturing and filter packaging.As a re
141、sult of our efforts,we have developed and introduced multiple new XBAW filters which are currently sampling and in production with multiple customers acrossmultiple markets.Our focus remains on improving the electromechanical coupling and quality factor of our resonator technology and the performanc
142、e of our fabricated filtersthrough design improvements and process optimization experiments.Recent Developments in R&D We concentrated on several products and end markets in fiscal 2024 including 5G mobile,Wi-Fi,CBRS,SATCOM,defense,and 5G infrastructure.Advancements in our Wi-Fi portfolio continued
143、in fiscal 2024.With the roll out of the Wi-Fi 7 frequency band,5.17-7.125 GHz,new filters are needed that can operate at highfrequency with ultra-wide bandwidth.This has driven investment in the development of both standard and custom XBAW filters to address this new market over the pastseveral year
144、s.We announced our first two Wi-Fi 6E filters in fiscal 2021,including a 5.5 GHz and 6.5 GHz XBAW filter solution with 675 MHz and 1180 MHz of bandwidth.In early fiscal 2022,we entered the Wi-Fi 6E market with our first design win in August of 2021 for a multiple-in-multiple-out(MIMO)gateway product
145、.7 Figure 4 Wi-Fi 6E and emerging Wi-Fi 7 channel frequency spectrum In early January 2022,we announced the addition of five additional design wins in Wi-Fi,four in Wi-Fi 6E and one in Wi-Fi 6,bringing the total number of Wi-Fi design winsto thirteen.We added two additional design wins in April 2022
146、,bringing the total number to fifteen,and we received one additional design win in Wi-Fi 6E in the June 2022quarter.In October 2022,we announced the addition of three new design wins in Wi-Fi 6E bringing total to nineteen.In May 2023,we announced the addition of one designwin in Wi-Fi 7 and two addi
147、tional design wins in Wi-Fi 6 bringing total to twenty-two.We are currently sampling and shipping volume pre-production and production filterswith multiple OEMs,ODMs and SoC makers.In June 2020,we entered into a strategic purchase agreement with a tier 1 enterprise-focused Wi-Fi OEM to create custom
148、er Wi-Fi 6E XBAW filters for a MU-MIMOenterprise router product.During fiscal 2021 and 2022,we developed multiple filters for this customer,all of which have been design-locked and successfully completedqualification in the June 2022 quarter.We entered into production with this customer in the first
149、 half of fiscal 2023.In April,2021,we announced that we had developed two new Wi-Fi 6E XBAW filters,a 5.6 GHz filter and a 6.6 GHz filter.The 5.6 GHz filter module covers the entire UNII1-4 spectrum and enables an additional 80 MHz and 160 MHz channel in UNII 4,while the 6.6 GHz filter module covers
150、 the UNII 5-8 spectrum.Current Wi-Fi 6Econfigurations allow for the use of six 80 MHz and three 160 MHz channels in the UNII 1-3 spectrum and fourteen 80 MHz and seven 160 MHz channels in the UNII 5-8spectrum.The XBAW 5.6/6.6 GHz coexistence filter modules allow for the use of seven 80 MHz and three
151、 160 MHz channels in the UNII 1-4 spectrum and twelve 80 MHzand six 160 MHz channels in the UNII 5-8 spectrum.Given that the 6 GHz portion of the Wi-Fi 6E standard has begun to experience utilization relatively recently,this newXBAW coexistence solution allows for an environment of greater capacity
152、in the 5 GHz bands.We received our first order from a tier-1 consumer-focused OEM on the sameday we introduced the filters,with the first order for the development of new multi-user,multiple-in-multiple-out mesh routing products for the consumer market.In June 2023,we announced the introduction of n
153、ext generation 5.6 GHz and 6.6 GHz filters with improved performance in a package greater than 4 times smaller compared to the previousgeneration of the product.During fiscal year 2024,we have released to production a suite of filters primarily aimed at this new Wi-Fi 7 market that is defined in Fig
154、ure 5.The XBAW technology isredefining the capability of our customers as we believe that Akoustis is the only filter supplier currently able to achieve the technical goal of achieving 60dB just 50MHz awayfrom the passband.Figure 5 Akoustis WIFI 7 filters We had several significant advancements in o
155、ur CBRS and 5G mobile infrastructure business during fiscal 2024 with the adoption of N104 and FR3.Since our technology issignificantly smaller and lighter than alternative commercial technologies,XBAW is able to provide comparable performance whilst reducing installation costs compared withconventi
156、onal cavity filters.In the June quarter of fiscal 2022,we entered production with three CBRS infrastructure OEMs,our first production ramps in mobile infrastructure.Also in that quarter,we finished the first phase development of our new 3.8 GHz filter for the US market.In late calendar 2020,the FCC
157、auctioned frequencies between 3.7GHz and 3.98 GHz for 5G mobile use in the United States.Carriers are currently building networks that operate between 3.7 GHz and 3.98 GHz;we are running seconditeration of our filters to address these bands and expect to begin sampling our new 3.8 GHz filter to OEMs
158、 in late calendar 2023 for use in small cell base stations.8 In the defense market,we built on our early successes in phased array radar and drone filters with the award of a Defense Advanced Research Projects Agency(DARPA)contract to advance XBAW technology in October of 2020,and the award of a sec
159、ond DARPA contract in April 2022 to advance the Companys XBAW technology to 18 GHz.The first program,a Direct-to-Phase-2(“DP2”)program,is to facilitate MEMS development,produce novel piezoelectric materials and device designs for both commercial anddefense markets.One of the major outcomes from the
160、DP2 program is to develop a piezo MEMS(“PDK”)for the Companys proprietary and patented XBAW process which isexpected to support customer engagements that leverage the PDK to create devices and circuits,including RF filters,using the XBAW process.Under the second program,theCompany intends to develop
161、 a novel mode overtone approach to circumvent trade-offs inherent in traditional BAW frequency scaling approaches.Akoustis currently has 12 commercial XBAW filters in its production and greater than 4 XBAW filters in development.Current product catalog filters include a 5.6 GHz Wi-Fifilter,a 5.2 GHz
162、 Wi-Fi filter,a 5.5 GHz Wi-Fi-6E filter,a 6.5 GHz Wi-Fi 6E filter,three small cell 5G network infrastructure filters including two Band n77 filters and oneBand n79 filter,a 3.8 GHz filter for defense phased-array radar applications,and a 3.6 GHz filter for the CBRS 5G infrastructure market.New devel
163、opments include standardcatalog and custom filters for the sub-7 GHz bands targeting 5G mobile device,network infrastructure,Wi-Fi CPE,automotive and defense markets.Our RFMi Technology and Business RFMi is focused on supplying SAW and Xtal based frequency components to automotive,industrial IoT,med
164、ical,telecom,consumer,and other markets.The team designs,develops and markets under RFMi-branded SAW band pass filters,notch filters,diplexers,duplexers,resonators and delay lines,as well as Xtal resonators,temperature sensingXtal resonators,temperature compensated crystal oscillators(“TCXO”),voltag
165、e controlled temperature compensated crystal oscillators(“VCTCXO”),crystal oscillators(“XO”),voltage controlled crystal oscillators(“VCXO”),oven controlled crystal oscillators(“OCXO”)and Xtal filters,etc.Technological Challenges Facing Customers for RFMi-branded Solutions While wireless spectrum exp
166、ands to above 3GHz where Akoustis XBAW products are focused,the spectrum under 3GHz is also becoming more and more crowded.Customersare losing“guard bands”next to their operating spectrum to competing applications and operators,and“co-existence”has become necessary for functionality for wirelesselec
167、tronics.LTE applications increasingly need to co-exist with Industrial,Scientific,and Medical(“ISM”)band applications,satellite signals are interfered by terrestrialsignals,industrial wireless control signals are saturated by communication signals,even medical wireless signals can be interrupted by
168、other RF power outputs.The moretraditional filtering technologies,like L-C(inductor capacitor)and ceramic filters,may not have a Q factor high enough to supply steep roll-off from passband to rejectionband.On the other hand,the demand for available data has also exploded,due to the increasing speed
169、of data transmission and digital communication,which requires faster andmore accurate piezo-ceramic resonators.Our RFMi-branded Solutions for the RFMi Customers RFMi is addressing jamming and high data rate problems by focusing on frequency components and supplying diverse and flexible SAW and Xtal
170、products.In its operationspectrum(about 30MHz to 3GHz),SAW technology offers one of the highest Q factors.RFMi provides custom and standard SAW band pass filters to allow a signal spectrumto pass while rejecting the other signals,as well as a SAW diplexer with one input and two output,SAW duplexers
171、that transmit and receive simultaneously for FrequencyDivision Duplex(“FDD”)applications,and SAW resonators for high frequency transmitters,as well as custom delay lines.For Xtal products,instead of only supplyingstandard Xtal resonators at a few frequencies,RFMi provides a family of Xtal products a
172、nd supports custom designs to accommodate a wider temperature range than standardproducts,stable frequency,and low jitter and phase noise.Our GDSI Services and Business GDSI supplies advanced back-end wafer processing and supply chain services to over 250 customers across multiple industries includi
173、ng automotive,IoT,defense,medical,optical and communications.Its services process multiple materials including silicon,silicon carbide,silicon germanium,fused silica,quartz,alumina,ceramics,MEMS,optical filers and components,gallium nitride and PZT.Service Challenges Facing Customers of GDSI-branded
174、 Solutions Semiconductor manufacturers in North America typically use overseas assembly and test(“OSAT”)partners for die preparation,which can take multiple weeks for service anddelivery of a finished product.GDSI is an ideal partner for complex die preparation for North American customers as it can
175、 offer same day service,in addition to advancedprototyping and production capacity for customers with low lead times.Additionally,GDSI has ISO,ITAR and Trusted Foundry Supplier(CAT 1A rank)accreditations,allowing it to service defense companies in the United States that often cannot outsource produc
176、tion to overseas partners.9 Our GDSI-branded Solutions for GDSI Customers GDSI offers wafer-thinning services for wafers up to 300 millimeters,die grinding,ultra-thin wafer grinding at greater than 50um,bonded wafers,and bumped wafers.Theservices offer tight tolerances for TTV and final thickness ac
177、curacy,3DICs/TSV with via reveal or grinding into interposer,DBG for ultra-thin die or increased die strength.GDSI also offers wafer polishing services for wafers up to 200 millimeters using a chemical mechanical polish with a mirror finish with a Ra10A,increased die strength,reduced warpage and whi
178、ch removes sub-surface damage.The division also offers a stealth dicing process for wafers up to 300 millimeters,which is a completely dry processwith frontside and backside processing capability for wafers with a thickness range of 75um to 800um.Additionally,GDSI can offer coring services,device pi
179、ck-and-place andautomated inspection services.Raw Materials Within its internal manufacturing operation for XBAW filters,Akoustis sources raw materials,process gases,metals and other miscellaneous supplies to fabricate its BAW RFfilter circuits.Materials range from substrates(used to deposit key pie
180、zoelectric materials)to standard dielectric-based laminates(used for packaging of the RF filter circuits).The Company sources at least two types of substrate materials for its BAW process and we have more than one supplier for one material and a single source for the other.Multiple process gases are
181、 used for material synthesis,process etching and wafer treatment.While there is more than one supplier for most process gases,the purity levels ofsuch gases may change by source.Hence,either purification or process requalification may be required when purchasing from a second source is required.Akou
182、stis sourcesvarious high purity metals for electrode formation and interconnect layers for its RF circuits.Such metals are available in various purity levels and are available from more thanone supplier.Other process handling hardware common to the semiconductor industry is available in abundance fr
183、om multiple suppliers.Consistent with other semiconductormanufacturers,the Company may have to work with all its suppliers to ensure adequate supply of raw materials,process gases and metals as the Company ramps from R&Dinto high volume manufacturing.RFMi Supply Chain RFMi mainly relies on its contr
184、act manufacturer,Tai-Saw Technology Co.,Ltd.(“TST”)to source raw materials,such as different chemicals and gases for front and back-endmanufacturing,quartz,lithium tantalate and certain bonded wafers,metal targets,Xtal blanks,semiconductor ICs,aluminum bonding wires and flip chip gold stub bumpsuppl
185、ies,packages and lids.Most raw materials have dual or multi-sources.However,certain materials,e.g.,high temperature co-fired ceramic(“HTCC”)ceramic packages,bonded wafers and automotive grade TCXO/VCTCXO ICs are single-sourced as there is no alternative supplier or the alternative supplier does not
186、guarantee automotive gradematerials.Many of RFMis customers are automotive and require a Production Part Approval Process(“PPAP”),where using an alternative source may require re-PPAP andtake efforts and time.RFMi intends to diversity its supply chain,however,it takes time and resources.Certain raw
187、material,like HTCC ceramic packages,may not have asecond source for the foreseeable future.Intellectual Property We rely on a combination of intellectual property rights,including patents and trade secrets,along with copyrights,trademarks and contractual obligations and restrictions toprotect our co
188、re technology and business.In the United States and internationally,as of September 01,2024,our IP portfolio included 97 patents,including one blocking patent that we have licensed from CornellUniversity.Additionally,we have 31 active and pending patent applications.These patents cover our XBAW RF f
189、ilter technology from the substrate level through the systemapplication layer.Where possible,we leverage both federal and state level R&D grants to support development and commercialization of our technology.Our owned patentsexpire between 2034 and 2040.We intend to continue to innovate and expand o
190、ur patent portfolio,and when appropriate,we will look to purchase license(s)that grant access toadditional intellectual property that enables,enhances or further expands our technical capabilities and/or product.We believe that Akoustis has competitive advantages from rights granted under our patent
191、 applications.Some applications,however,may not result in the issuance of anypatents.In addition,any future patent may be opposed,contested,circumvented or designed around by a third party or found to be unenforceable or invalidated.Others maydevelop technologies that are similar or superior to our
192、proprietary technologies,duplicate our proprietary technologies or design around patents owned or licensed by us.We generally control access to,and use of,our confidential information through the use of internal and external controls,including contractual protections with employees,contractors and c
193、ustomers.We rely in part on the United States and international copyright laws to protect our intellectual property.All employees and consultants are requiredto execute confidentiality and intellectual property assignment agreements in connection with their employment and consulting relationships wi
194、th us.We also require them toagree to disclose and assign to us all inventions conceived or made in connection with the employment or consulting relationship.Competition The RF filter market is controlled by a relatively small number of RF component suppliers.These companies include,among others,Bro
195、adcom Corporation,MurataManufacturing Co.,Ltd.(“Murata”),Qorvo,Skyworks Solutions Inc.,Taiyo Yuden Co.Ltd.,and Qualcomm Incorporated.Broadcom Corporation and Qorvo dominate the highband BAW filter market,controlling a significant portion of the customer base and are increasing capacity to meet the g
196、rowing RF filter demand of the 4G/5G cellular market.We compete directly with these companies to secure design slots inside RFFE module targeting companies that procure filters or internally source filters.While many of ourcompetitors have more resources than we have,we believe that our filter desig
197、ns will be superior in performance,and we approach prospective customers as a pure-play filtersupplier,offering advantages in performance over the full frequency range at competitive costs.Our challenges include convincing our customers that we have a strongintellectual property position,we will be
198、able to deliver in volume,we will meet their price targets,and we can satisfy quality,reliability and other requirements.For a list ofother competitive factors,see“Item 1A.Risk Factors-We are still developing many of our products,and they may not be accepted in the market.”10 The Xtal market is more
199、 mature and there are many players,including Epson,KDS Daishinku,Kyocera,Murata and NDK from Japan and TXC from Taiwan.Our RFMiproducts are largely focused on niche markets such as Industrial IoT and professional audio,which may reduce competition with these large,high volume competitors.Inaddition,
200、our RFMi products primarily consist of TCXO,VCTCXO and VCXO,instead of low cost Xtal.However,we may still compete with market participants with moreresources and purchasing power than us.Employees We place an emphasis on hiring the best talent at the right time to enable our core technology and busi
201、ness growth.This includes establishing a competitive compensation andbenefits package,thereby enhancing our ability to recruit experienced personnel and key technologists.As of June 30,2024,we had a total of 117 full-time employees.We willcontinue to hire specific and targeted positions to further e
202、nable our technology and manufacturing capabilities as and when appropriate and as resources permit.Government Regulations Our business and products in development are or may become subject to regulation by various federal and state governmental agencies,including the radio frequency emissionregulat
203、ory activities of the Federal Communications Commission(the“FCC”),the consumer protection laws of the Federal Trade Commission(the“FTC”),the import/exportregulatory activities of the Department of Commerce,international traffic in arms regulations(ITAR)administered by the Department of State,the pro
204、duct safety regulatoryactivities of the Consumer Products Safety Commission,and the environmental regulatory activities of the Environmental Protection Agency(the“EPA”).The rules and regulations of the FCC limit the RF used by,and level of power emitting from,electronic equipment.Our RF filters,as a
205、 key element enabling consumerelectronic smartphone equipment,are required to comply with these FCC rules and may require certification,verification or registration of our RF filters with the FCC.Certification and verification of new equipment requires testing to ensure the equipments compliance wit
206、h the FCCs rules.The equipment must be labeled according to theFCCs rules to show compliance with these rules.Testing,processing of the FCCs equipment certificate or FCC registration and labeling may increase development andproduction costs and could delay the implementation of our XBAW acoustic wav
207、e resonator technology for our RF filters and the launch and commercial productions of ourfilters into the U.S.market.Electronic equipment permitted or authorized to be used by us through FCC certification or verification procedures must not cause harmfulinterference to licensed FCC users,and may be
208、 subject to RF interference from licensed FCC users.Selling,leasing or importing non-compliant equipment is considered aviolation of FCC rules and federal law,and violators may be subject to an enforcement action by the FCC.Any failure to comply with the applicable rules and regulations of theFCC co
209、uld have an adverse effect on our business,operating results and financial condition by increasing our compliance costs and/or limiting our sales in the United States.Like our XBAW products,RFMis SAW and Xtal products are frequency components and are subject to similar FCC rules.For instance,many of
210、 RFMis customers operate inISM(Industrial,Scientific,and Medical)band,MICS(Medical Implant Communication System),WMTS(Wireless Medical Telemetry Service)and other bands regulated byFCC,in which transmission power level is restricted and products have to pass the FCC,and in certain cases FDA certific
211、ation to be allowed in the market.Even thoughRFMis components do not need to be certified by FCC and/or FDA,our customers modules and systems which incorporate RFMi components may need to be certified.Anyfailure of RFMis customers to be certified would affect RFMis sales.The semiconductor and electr
212、onics industries also have been subject to increasing environmental regulations.A number of domestic and foreign jurisdictions seek to restrict theuse of various substances,a number of which have been used in our products in development or processes.While we have implemented a compliance program to
213、ensure ourproduct offering meets these regulations,there may be instances where alternative substances will not be available or commercially feasible,or may only be available from asingle source,or may be significantly more expensive than their restricted counterparts.Additionally,if we were found t
214、o be non-compliant with any such rule or regulation,wecould be subject to fines,penalties and/or restrictions imposed by government agencies that could adversely affect our operating results.We will continue to monitor our qualityprogram and expand as required to maintain compliance and ability to a
215、udit our supply chain.Noncompliance with applicable regulations or requirements could subject us to investigations,sanctions,mandatory product recalls,enforcement actions,disgorgement ofprofits,fines,damages,civil and criminal penalties,or injunctions.An adverse outcome in any such litigation could
216、require us to pay contractual damages,compensatorydamages,punitive damages,attorneys fees and costs.These enforcement actions could harm our business,financial condition and results of operations.If any governmentalsanctions are imposed,or if we do not prevail in any possible civil or criminal litig
217、ation,our business,financial condition and results of operations could be materiallyadversely affected.In addition,responding to any action will likely result in a significant diversion of managements attention and resources and an increase in professionalfees.Recent Legislation In August 2022,the C
218、reating Helpful Incentives to Produce Semiconductors and Science Act(the“CHIPS Act”)was signed into law.The CHIPS Act provides for a 25%refundable tax credit on certain investments in domestic semiconductor manufacturing.The credit is provided for qualifying property which is placed in service after
219、 December31,2022.The CHIPS Act also provides for certain other financial incentives to further investments in domestic semiconductor manufacturing.The Company recorded aninvestment tax credit of$3.2 million during the fiscal year ended June 30,2024.ITEM 1A.RISK FACTORS This section is a summary of t
220、he risks that we presently believe are material to the operations of the Company.Additional risks of which we are not presently aware or whichwe presently deem immaterial may also impair the Companys business,financial condition or results of operations.11 Risk Factors Summary Risks Related to our F
221、inancial Condition We have a history of operating losses and will need to raise significant additional capital to continue our business and operations.Additionally,the Qorvo Litigationresulted in a verdict against the Company,awarding Qorvo approximately$38.6 million in damages,and the District Cour
222、t has since awarded Qorvo approximately$11.7 million in attorneys fees and approximately$7.3 million in pre-and post-judgment interest,which has severely constrained our liquidity.If we are unable toarrange financing in the near term or timely appeal recent judgments and awards issued by the Distric
223、t Court,we may be forced to seek protection by filing a voluntarypetition for relief under the Bankruptcy Code,which would have a material adverse effect on our business and could cause you to lose all of your investment.Our independent registered public accounting firm has expressed doubt about our
224、 ability to continue as a going concern.We may be required to identify and evaluate possible financial and strategic alternatives and their implications for the Company.All of our debt obligations will have priority over our Common Stock with respect to payment in the event of a bankruptcy,liquidati
225、on dissolution or winding up.Servicing our debt requires a significant amount of cash or Common Stock,and we may not have sufficient cash flow from our business or have the ability to issue thenecessary number of shares of Common Stock to pay our substantial debt.Risks Related to our Business and th
226、e Industry in which we Operate We have a limited operating history upon which investors can evaluate our business and future prospects.We may not generate sufficient revenues to achieve profitability.We have identified material weaknesses in our internal control over financial reporting.If we are no
227、t able to remediate these material weaknesses appropriately andtimely,or if we are unable to implement and maintain effective internal control over financial reporting in the future,this could result in losses from errors,harm ourreputation or cause investors to lose confidence in the reported finan
228、cial information.We have recently engaged,and may in the future engage,in acquisitions that could disrupt our business,cause dilution to our shareholders and harm our financialcondition and operating results.We are subject to a number of restrictive covenants relating to our indebtedness,which may r
229、estrict our business and financing activities.Our business,results of operation and financial condition have been,and could in the future be,adversely affected by a pandemic,epidemic or other public healthemergency.The industry and the markets in which the Company operates are highly competitive and
230、 subject to rapid technological change.We are still developing many of our products,and they may not be accepted in the market.Winning business in the semiconductor industry is subject to a lengthy process that often requires us to incur significant expense,from which we may ultimatelygenerate no re
231、venue.We face risks associated with the operation of our manufacturing facility.A supply shortage,such as the one recently experienced by the semiconductor industry,could disrupt normal business activity,and have an adverse effect on ourresults of operations.The average selling prices of semiconduct
232、or products in our markets have often decreased rapidly and may do so in the future.Problems in scaling our manufacturing operations or poor manufacturing yields could have a material adverse effect on our business.Industry overcapacity could cause us to underutilize our manufacturing facilities and
233、 have a material adverse effect on our financial performance.We face intense competition,which may cause pricing pressures,decreased gross margins and loss of potential market share and may materially and adversely affectour business,financial condition and results of operations.We contract with a n
234、umber of large service providers and product companies that have considerable bargaining power,which may require us to agree to terms andconditions that could have an adverse effect on our business or ability to recognize revenues.We may be subject to risks related to doing business in,and having co
235、unterparties based in,foreign countries.Economic regulation in China could adversely impact our business and results of operations.We depend on a few large customers for a substantial portion of our revenue.Global shortages in manufacturing capacities could negatively affect our operations and negat
236、ively impact our results of operations.Changes in general economic conditions,together with other factors,cause significant upturns and downturns in the industry,and our business,therefore,may alsoexperience cyclical fluctuations in the future.If we are unable to attract and retain qualified personn
237、el to contribute to the development,manufacture and sale of our products,we may not be able to effectivelyoperate our business.12 Risks Related to Our Intellectual Property If we fail to obtain,maintain and enforce our intellectual property rights,we may not be able to prevent third parties from usi
238、ng our proprietary technologies.We have a limited number of patent applications,which may not result in issued patents or patents that fully protect our intellectual property.We are and may in the future be involved in lawsuits to protect or enforce our patents,which could be expensive,time-consumin
239、g and unsuccessful.We need to protect our trademark rights and disclosure of our trade secrets to prevent competitors from taking advantage of our goodwill.Development of certain technologies with our customers or manufacturers may result in restrictions on jointly-developed intellectual property.We
240、 are and may be subject to claims of infringement,misappropriation or misuse of third party intellectual property that,regardless of merit,could result in significantexpense and loss of our intellectual property rights.Risks Related to Regulatory Requirements Government regulation may adversely affe
241、ct our business.We may incur substantial expenses in connection with regulatory requirements,and any regulatory compliance failure could cause our business to suffer.There could be an adverse change or increase in the laws and/or regulations governing our business.Investment Risks Our common stock h
242、as been thinly traded and its share price in the public markets has experienced,and may in the future experience,extreme volatility.Stockholders may experience dilution of their ownership interests because of the future issuance of additional shares of our stock or other securities.General Risk Fact
243、ors Security breaches and other disruptions could compromise our proprietary information and expose us to liability,which would cause our business and reputation tosuffer.Litigation or legal proceedings,including product liability claims,could expose us to significant liabilities,occupy a significan
244、t amount of our managements time andattention and damage our reputation.There could be an adverse change or increase in the laws and/or regulations governing our business.Risks Related to our Financial Condition We have a history of operating losses and will need to raise significant additional capi
245、tal to continue our business and operations.Additionally,the Qorvo Litigationresulted in a verdict against the Company,awarding Qorvo approximately$38.6 million in damages,and the District Court has since awarded Qorvo approximately$11.7million in attorneys fees and approximately$7.3 million in pre-
246、and post-judgment interest,which has severely constrained our liquidity.If we are unable to arrangefinancing in the near term,or to timely appeal the verdict and fee awards,we will be forced to seek protection by filing a voluntary petition for relief under the BankruptcyCode,which would have a mate
247、rial adverse effect on our business and could cause you to lose all of your investment.We are experiencing financial and operating challenges.As of June 30,2024,we had$24.4 million of cash and cash equivalents compared to$84.4 million of current liabilities,resulting in negative working capital.Curr
248、ent liabilities include a litigation related contingent liability in respect of an adverse judgment against the Company in the QorvoLitigation awarding Qorvo approximately$38.6 million in damages and subsequently issued orders awarding Qorvo approximately$11.7 million in attorneys fees andapproximat
249、ely$7.3 million in pre-and post-judgment interest.The verdict in the Qorvo Litigation together with the related awards have created significant uncertaintyregarding the Companys financial condition and prospects.The Company is continuing to evaluate the impact of the verdict and the related awards o
250、n its business,results ofoperations,and financial condition;however,depending on both(i)the outcome of the Companys post-trial motions and the District Courts final judgment and(ii)theCompanys ability to arrange any financing or to timely appeal the District Courts judgment and awards,which may requ
251、ire the Companys posting an undertaking(such as anappeal bond),the Company will be required to seek protection under applicable bankruptcy laws.13 Factors that could limit our ability to raise additional capital include,among other matters:the expectation that we will be forced to pursue a reorganiz
252、ation proceeding under Chapter 11 of the U.S.Bankruptcy Code;the expectation that we will continue to incur losses and generate negative cash flows from operations;our substantially limited liquidity and capital resources to meet our obligations as they become due;the potential that our common stock
253、 will be delisted by Nasdaq in the event we fail to regain compliance in a timely manner with the minimum bid price requirementand maintain compliance with other listing requirements;the amounts outstanding under our$44.0 million principal amount of our 6.0%Convertible Senior Notes due 2027(the“conv
254、ertible notes”)and a$4.0 millionpromissory note issued in connection with our acquisition of GDSI(including the potential we may experience one or more defaults or events of default under suchinstruments);and the other risks and uncertainties described in this Risk Factors and Managements Discussion
255、 and Analysis of Financial Condition and Results of Operations sectionsof this Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q.Any inability to raise adequate funds on commercially reasonable terms and in the near term or to timely appeal the District Courts judgment
256、 and awards would force us toseek protection by filing a voluntary petition for relief under the Bankruptcy Code,resulting in our stockholders losing some or all of their investment.Our independent registered public accounting firm has expressed doubt about our ability to continue as a going concern
257、.The Companys historical financial statements have been prepared under the assumption that we will continue as a going concern.Our independent registered public accountingfirm has issued a report that included an explanatory paragraph expressing substantial doubt in our ability to continue as a goin
258、g concern.Our ability to continue as a goingconcern is dependent upon our ability to obtain additional equity financing or other capital or to timely appeal the District Courts judgment and awards.Our financialstatements do not include any adjustments that might result from the outcome of this uncer
259、tainty.However,if adequate funds are not available to us when we need them,wewill be forced to file a voluntary petition for relief under the Bankruptcy Code and may be required to cease or curtail our operations,raising substantial doubt about our abilityto continue as a going concern.It may be nec
260、essary for us to pursue financial and strategic alternatives and their implications for the Company and its stockholders are uncertain.We are in the process of identifying and evaluating possible financial and strategic alternatives and their implications for the Company.No assurance can be given as
261、 to whetherany particular financial or strategic alternative will be undertaken,and if so,upon what terms or conditions.We may not have enough available cash to pursue a strategicrestructuring,refinancing,or other transaction,and may have to file for bankruptcy.Bankruptcy,whether Chapter 11 or Chapt
262、er 7,could result in significant decrease in valuefor all stockholders.In addition,if we file for bankruptcy,it may cause disruption in supply from critical vendors required to continue operations,negatively impact sales ordersand collections from customers and negatively impact employee relations.A
263、ll of our debt obligations will have priority over our Common Stock with respect to payment in the event of a bankruptcy,liquidation dissolution or winding up and theconvertible notes may be accelerated upon certain events of default.In any bankruptcy,liquidation,dissolution or winding up of the Com
264、pany,shares of Common Stock would rank in right of payment or distribution below all debt claims againstus.As a result,holders of Common Stock will not be entitled to receive any payment or distribution in respect of their shares prior to the discharge of all debt claims against us.As a result,holde
265、rs of shares of Common Stock will not be entitled to receive any payment or other distribution of assets in the event of a bankruptcy or upon a liquidation ordissolution until after all of our obligations to our debt holders.Accordingly,holders of Common Stock may lose their entire investment in the
266、 event of a bankruptcy,liquidation,dissolution or winding up of the Company.Additionally,the indenture governing our$44.0 million aggregate principal amount of convertible notes includes certain events of default,the occurrence of which enables theconvertible note holders to declare all of the conve
267、rtible notes to be due and payable immediately.These events of defaults include,among other things,(i)the Common Stocknot being listed on an exchange such as the Nasdaq Capital Market and(ii)a final judgment or judgments for the payment of money being entered by a court in an aggregateamount exceedi
268、ng$10.0 million and such judgments remain undischarged,unpaid or unstayed for a period of 60 days.As described below under the risk factor titled“Ourfailure to meet the minimum bid price for continued listing on The Nasdaq Capital Market could adversely affect our ability to publicly or privately se
269、ll equity securities andthe liquidity of our common stock,and could result in the delisting of our Common Stock from The Nasdaq Capital Market.”,we have received a notice from Nasdaqs ListingsQualifications Department that it had determined to delist the Common Stock.While we have requested a hearin
270、g in respect of the delisting determination,there can be noassurance that Nasdaq will grant the Company any compliance period.As a result,our Common Stock may be delisting,constituting an event of default under the convertiblenotes.Furthermore,the District Court has issued awards in an aggregate amo
271、unt of$19.0 million and is expected to issue a final judgment in respect of the jury award ofapproximately$38.6 million in the Qorvo Litigation.Once the final judgment is rendered by the District Court,the Company will have 30 days within which to challenge it(during which time the judgment and rela
272、ted awards are automatically stayed).However,if the Company does not timely appeal the judgment and awards,since they aggregatein excess of$10.0 million,they would constitute an event of default under the convertible notes if they remain undischarged,unpaid or unstayed for a period of 60 daysfollowi
273、ng expiration of the 30-day appeal period.14 Servicing our debt requires a significant amount of cash or Common Stock,and we may not have sufficient cash flow from our business or have the ability to issue thenecessary number of shares of Common Stock to pay our substantial debt.We have incurred$44.
274、0 million of indebtedness pursuant to convertible notes issued in June 2022 and have issued a$4.0 million promissory note in connection with ouracquisition of GDSI.This level of debt could have significant consequences on future operations,including:increasing our vulnerability to adverse economic a
275、nd industry conditions;making it more difficult for us to meet our payment and other obligations;making it more difficult to obtain any necessary future financing for working capital,capital expenditures,debt service requirements or other purposes;requiring the dedication of a substantial portion of
276、 any cash flow from operations to service our indebtedness,thereby reducing the amount of cash flow available forother purposes,including capital expenditures;placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital than we h
277、ave;and limiting our flexibility in planning for,or reacting to,changes in our business and the markets in which we compete.Accrued interest on our 6.0%Convertible Senior Notes due 2027 is payable semi-annually in cash or freely tradable shares of Common Stock.Our ability to make scheduledpayments o
278、f interest depends on our future performance,which is subject to economic,financial,competitive and other factors beyond our control.Our business may notgenerate cash flow from operations in the future sufficient to service our debt in cash and make necessary capital expenditures.If we are unable to
279、 generate sufficient cash flow to satisfy payment obligations under our convertible notes,we may be required to adopt one or more alternatives,such asselling assets or obtaining additional equity capital on terms that may be onerous or highly dilutive.We may not be able to engage in any of these act
280、ivities or engage in theseactivities on desirable terms,which could result in a default on our debt obligations.If we determine to pay the interest in shares of Common Stock,it could materially diluteour current stockholders.Our ability to raise capital may be materially adversely impacted by econom
281、ic and geopolitical uncertainties.A sustained disruption in the capital markets from economic and geopolitical uncertainties such as conflicts in Ukraine and the Middle East,pandemics such as COVID-19,bank failures,inflation,recession,or higher interest rates could negatively impact our ability to r
282、aise capital.In the past,we have financed our operations primarily by theissuance of equity and debt securities.However,we cannot predict if such economic and geopolitical uncertainties will impact the capital markets or if we will be able to raiseadditional funds on terms acceptable to us.Such macr
283、o-economic disruptions may disrupt our ability to raise additional capital to finance our operations in the future,whichcould materially and adversely affect our business,financial condition and prospects,and could ultimately cause our business to fail.Risks Related to our Business and the Industry
284、in which we Operate We have a limited operating history upon which investors can evaluate our business and future prospects.We are an emerging commercial company that began meaningful commercial operations in 2019 by selling advanced single-crystal BAW filter products for RFFEs for use inthe mobile
285、wireless device industry.Historically,we have primarily focused on R&D of high efficiency acoustic wave resonator technology utilizing single-crystal piezoelectricmaterials,and have not become profitable from operations.Since our expectations of potential customers and future demand for our products
286、 are based on only limited experience,it is difficult for our management and our investors toaccurately forecast and evaluate our future prospects and our revenues.Our proposed progression of our operations is therefore subject to all of the risks inherent in light of theexpenses,difficulties,compli
287、cations and delays frequently encountered in connection with the growth of any new business and the development of a product,as well as thoserisks that are specific to our business in particular.The risks include,but are not limited to,our reliance on third parties to complete some processes for the
288、 manufacturing andpackaging of our products,the possibility that we will not be able to develop functional and scalable products,or that although functional and scalable,our products and/orservices will not be accepted in the market.To successfully introduce and market our products at a profit,we mu
289、st establish brand name recognition and competitive advantagesfor our products.There are no assurances that the Company can successfully address these challenges.If it is unsuccessful,the Company and its business,financial conditionand operating results will be materially and adversely affected.We m
290、ay not generate sufficient revenues to achieve profitability.We have incurred operating losses since our inception and expect to continue to have negative cash flow from operations.We have only generated minimal revenues fromshipment of product while our primary sources of funds have been R&D grants
291、,MEMS foundry services(which we exited in 2021),issuances of our equity,and debt.Ourfuture profitability will depend on our ability to create a sustainable business model and generate sufficient revenues,which is subject to a number of factors,including ourability to successfully implement our strat
292、egies and execute our R&D plan,our ability to implement our improved design and cost reductions into manufacturing of our RFfilters,the availability of funding,market acceptance of our products,consumer demand for end products incorporating our products,our ability to compete effectively in acrowded
293、 field,our ability to respond effectively to technological advances by timely introducing our new technologies and products,and global economic and politicalconditions.15 Our future profitability also depends on our expense levels,which are influenced by a number of factors,including the resources w
294、e devote to developing and supporting ourprojects and potential products,the continued progress of our research and development of potential products,our ability to improve R&D efficiencies,license fees or royaltieswe may be required to pay,and the potential need to acquire licenses to new technolog
295、y,the availability of intellectual property for licensing or acquisition,or the use of ourtechnology in new markets,which could require us to pay unanticipated license fees and royalties in connection with these licenses.Our development and commercialization efforts may prove more expensive than we
296、currently anticipate,and we may not succeed in increasing our revenues to offset higherexpenses.These expenses,among other things,may cause our net income and working capital to decrease.If we fail to generate sufficient revenue and manage our expenses,we may never achieve profitability,which would
297、adversely and materially affect our ability to provide a return to our investors.We have identified a material weakness in our internal control over financial reporting.If we are not able to remediate this material weakness appropriately and timely,orif we are unable to implement and maintain effect
298、ive internal control over financial reporting in the future,this could result in losses from errors,harm our reputation orcause investors to lose confidence in the reported financial information,all or any of which could have a material adverse effect on our results of operations and financialcondit
299、ion,which,in turn,could adversely affect the market price of our Common Stock,our access to debt or other capital markets or other aspects of our business,prospects,results of operations or financial condition.As a public company,we are required to maintain internal control over financial reporting
300、and to report any material weaknesses in such internal control.A material weaknessis a deficiency,or a combination of deficiencies,in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of acompanys annual or interim financial statements
301、 will not be prevented or detected on a timely basis.Section 404 of the Sarbanes-Oxley Act of 2002(“Sarbanes-Oxley”)requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on internal control over financialreporting.A
302、s discussed further in Item 9A,“Controls and Procedures,”we have identified a material weakness in our internal control over financial reporting relating to the design andimplementation of access security and program change management controls for certain financially relevant systems that ensure app
303、ropriate access to data and adequate systemchanges.We describe the specific issues leading to these conclusions in Item 9A,“Controls and ProceduresManagements Annual Report on Internal Control over FinancialReporting.”The actions we are taking to remediate the material weaknesses may be insufficient
304、 and we may in the future discover other areas of our internal controls that needimprovement.If we have material weakness in our internal control over financial reporting,we may not detect errors on a timely basis and our financial statements may bematerially misstated.Additionally,if we are unable
305、to assert that our internal control over financial reporting is effective or if our independent registered public accounting firmis unable to express an opinion as to the effectiveness of our internal control over financial reporting,we may not be able to access debt markets,equity investors may los
306、econfidence in the accuracy and completeness of our financial reports and the market price of our Common Stock could be adversely affected,and we could become subject toinvestigations by Nasdaq,the SEC or other regulatory authorities,which could require additional financial and management resources.
307、We have recently engaged,and may in the future engage,in acquisitions that could disrupt our business,cause dilution to our shareholders and harm our financialcondition and operating results.In October 2021,we acquired a majority ownership position in RFMi and,on April 29,2022,exercised the right to
308、 acquire the remaining 49%.In January 2023,we acquired allof the outstanding capital stock of GDSI.The consideration for the acquisitions included cash,Common Stock and a secured promissory note.We may in the future makeadditional acquisitions of,or investments in,companies that we believe have prod
309、ucts or capabilities that are a strategic or commercial fit with our current business or otherwiseoffer opportunities for our company.In connection with these acquisitions or investments,we may:issue Common Stock or other forms of equity that would dilute our existing shareholders percentage of owne
310、rship,incur debt and assume liabilities,and incur amortization expenses related to intangible assets or incur large and immediate write-offs.We may not be able to complete acquisitions on favorable terms,if at all.If we do complete an acquisition,such as of RFMi and GDSI,we cannot assure you that it
311、 willultimately strengthen our competitive position,that it will be viewed positively by customers,financial markets or investors or that we will otherwise realize the expectedbenefits of such an acquisition to the anticipated extent or at all.Furthermore,the acquisitions of RFMi and GDSI and any fu
312、ture acquisitions could pose numerous additionalrisks to our expected operations,including,but not limited to:problems integrating the purchased business,products or technologies,challenges in achieving strategic objectives,cost savings and other anticipated benefits,increases to our expenses,the as
313、sumption of significant liabilities,which may have been previously unknown or not discoverable through diligence,that exceed the limitations of any applicableindemnification provisions or the financial resources of any indemnifying party,16 inability to maintain relationships with prospective key cu
314、stomers,vendors and other business partners of the acquired businesses,diversion of managements attention from its day-to-day responsibilities,difficulty in maintaining controls,procedures and policies during the transition and integration,entrance into marketplaces where we have no or limited prior
315、 experience and where competitors have stronger marketplace positions,potential stockholder litigation challenging the acquisition,which could result in significant costs of defense,indemnification and liability,potential loss of key employees,particularly those of the acquired entity,and historical
316、 financial information may not be representative or indicative of our results as a combined company.Acquisitions may also have unanticipated tax,legal,regulatory and accounting ramifications,including recording goodwill and non-amortizable intangible assets that aresubject to impairment testing on a
317、 regular basis and potential periodic impairment charges and incurring amortization expenses related to certain intangible assets.We have recorded,and may record in the future,goodwill and intangible and long-lived assets as a result of acquisitions and other investments,and changes in futurebusines
318、s conditions have caused,and in the future could cause,these assets to become impaired,requiring substantial write-downs that reduces our operating income.As a result of our acquisitions of RFMi and GDSI,we recorded approximately$14.6 million of goodwill and$17.7 million of intangible assets.Further
319、more,the carrying valueof our long-lived assets is based on certain assumptions and estimates regarding their fair value.GAAP rules require us to test our goodwill and intangible assets for impairmenton an annual basis,or more frequently if indicators for potential impairment exist.The Company asses
320、ses the recoverability of its long-lived assets,including property andequipment,when there are indications that the assets might be impaired.As described in Note 3 to the financial statements included with this Report,during the quarter endedMarch 31,2024,the Company observed continuing declines in
321、its stock price,which led it to determine that a triggering event had occurred and therefore the Companyperformed a quantitative test for its two reporting units,which led to a goodwill impairment charge of approximately$8.1 million.Additionally,the Company recorded animpairment charge against its p
322、roperty plant and equipment of$35.4 million during the fiscal year ended June 30,2024 reflecting the difference between the carrying amount ofthe assets and their fair value.We are subject to a number of restrictive covenants relating to our indebtedness,which may restrict our business and financing
323、 activities.The indenture governing our convertible notes imposes operating and other restrictions on us.Such restrictions may affect,and in many respects limit or prohibit,among otherthings,our ability to:incur or guarantee additional indebtedness;issue preferred stock or stock of any subsidiary;ma
324、ke investments or acquisitions;merge,consolidate,dissolve or liquidate;engage in certain asset sales(including the sale of stock of our subsidiary);grant liens(except permitted liens);pay dividends;engage in transactions with our affiliates;and enter into a new line of business.The restrictions in t
325、he indenture governing the convertible notes may prevent us from taking actions that we believe would be in the best interests of our business,and maymake it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted.We also
326、 may incur future debtobligations that might subject us to additional restrictive covenants that could affect our financial and operational flexibility.Our ability to comply with these covenants infuture periods will largely depend on the pricing of our products and services,and our ability to succe
327、ssfully implement our overall business strategy.We cannot assure you thatwe will be granted waivers or amendments to these agreements if for any reason we are unable to comply with these agreements.The breach of any of these covenants andrestrictions could result in a default under the indenture gov
328、erning the convertible notes,which could result in an acceleration of our indebtedness.17 Our business,results of operation and financial condition have been,and could in the future be,adversely affected by a pandemic,epidemic or other public healthemergency.The COVID-19 pandemic had a significant i
329、mpact on worldwide economic activity and caused disruptions in our supply chain and distribution networks as well as salesactivity.Another pandemic,including a new COVID-19 variant,or other public health emergency,together with preventative measures taken to contain or mitigate such crises,could adv
330、ersely impact our results of operations and financial conditions.In addition,a pandemic or other public health emergency could impact the proper functioning offinancial and capital markets,foreign currency exchange rates,product and energy costs,labor supply and costs,and interest rates.Any pandemic
331、 or other public healthemergency could also amplify the other risks and uncertainties described in this Annual Report on Form 10-K.We cannot reasonably predict the ultimate impact of any pandemic or other public health emergency,including the extent of any adverse impact on our business,results ofop
332、erations and financial condition,which will depend on,among other things,the duration and spread,the impact of governmental regulations that may be imposed inresponse,the effectiveness of actions taken to contain or mitigate the outbreak,the availability,safety and efficacy of vaccines,including aga
333、inst emerging variants of theinfectious disease,and global economic conditions.Our sales efforts typically function by in-person meetings with customers and potential customers to discuss our products.The method and timing of these meetings has beenaltered due to stay-at-home orders and travel restrictions relating to COVID-19.This limitation on the ability of our sales personnel to maintain their
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